Steel reinforcement-bar futures in Shanghai declined, snapping a five-day rally, on renewed concern that China’s supply may outpace demand as steelmakers added output and as manufacturing slows.
Rebar for delivery in October on the Shanghai Futures Exchange lost as much as 1.1 percent to 3,486 yuan ($569) a metric ton and was at 3,493 yuan at 10:56 a.m. in Beijing. Futures have retreated 12 percent this year.
China’s daily crude steel output rose 0.1 percent to 2.16 million tons in early-June versus late-May, Hu Yanping, an analyst at Custeel.com, said yesterday, citing data from the China Iron & Steel Association. Output from major steel companies rose 1.3 percent during the same period.
“The rebounding output reminded market participants that the chronically oversupplied steel market isn’t about to get better,” Ren Xinlei, an analyst at Luzheng Futures Co., said today by phone from Jinan. Cash-market transactions also cooled yesterday as the market turned “downbeat,” he said.
The preliminary reading of 48.3 for a Purchasing Managers’ Index released today by HSBC Holdings Plc and Markit Economics compares with the 49.1 median estimate in a Bloomberg News survey of 15 economists. May’s final reading of 49.2 was the first below 50 since October, indicating contraction.
Iron ore prices for immediate delivery at Tianjin port in China yesterday gained 2 percent to $120 a dry ton, rising for a fifth day, according to The Steel Index Ltd. The raw material is a key ingredient for steel production.
The average spot price for rebar in China was unchanged at 3,387 yuan a ton yesterday, according to data from Beijing Antaike Information Development Co.
To contact Bloomberg News staff for this story: William Bi in Beijing at firstname.lastname@example.org
To contact the editor responsible for this story: Brett Miller at email@example.com